Small businesses cry foul over workplace safety act
Pro-labor law feared to weaken business sentiment, job creation
The owner of a Seoul-based Mexican restaurant is concerned about the enactment of a pro-labor workplace safety act, as he will end up spending more on labor and legal consultations. He argued the act will also shrink the overall sentiment for most self-owned businesses, which will do little good in creating more jobs.
The controversial Serious Accidents Punishment Act took effect on Jan. 27 for owners of small businesses with more than five employees but less than 50. The business owners will face prison sentences of more than one year or have to pay fines of 1 billion won ($750,000) in the event of a fatal workplace accident.
“The biggest fear is that we will have to allocate a budget for consulting with a labor attorney more frequently than before,” he said on condition of anonymity, Wednesday. The owner of the food business employs more than five regular workers.
“This is one of the evident downsides of the act from the perspective of small business owners. But more of a problem is that the law will weaken the business investor sentiment, as most of them are likely to walk on eggshells around their employees. This will not help create more jobs across the nation.”
Under the act, even small workplaces are required to abide by stricter internal safety control systems, and undergo mandatory inspections of any worksite risk factors and take relevant measures at least once every half a year.
Some others took issue with the unfair application of the act to all industries.
“The controversial act does not reflect reality,” the head of a local health care business said. “For instance, most service industries have very rare reports of serious accidents. This looks unfair for the government and relevant authorities to enforce the regulation on small businesses in such areas.”
He acknowledged the purpose of the act is in the right direction, as employers are also responsible for building safer workplaces for their employees. But the act should come with exceptions reflecting the circumstances of the nation’s small businesses.
“If small business owners are arrested for violation of the act and leave their worksite for some time, the business is extremely vulnerable to collapse,” he said. “This is because most small and medium-sized enterprises or self-employed people rely largely on one-person leadership. Against that backdrop, their business morale will be hit by the enactment of the act from a medium- to longterm viewpoint.”
Industry officials are also moving to take joint actions in protest of the act. More than 3,000 small business owners and self-employed gathered Wednesday in front of the National Assembly in Seoul, urging the ruling and opposition parties to renew and extend a grace period on the law’s implementation for them.
Lim Woo-taek, head of the safety and health division at the Korea Enterprises Federation, also stressed the dire need to revise the act in a way that reflects the reality of small businesses.
“Most small businesses are financially insufficient, so they cannot afford to hire professional workers as easily as big firms can,” he said. “The heightened safety standards — set by the act — will require them to hire legal and labor specialists in the long run.”
Even if the government pledges to offer free consulting, this is not enough for more than 800,000 small businesses here to receive the needed advice in time, according to him.